*FG says whooping sum of $10bn required annually to revive power sector
*That there’s no infrastructural requirement to attract investors to the sector now
*Stresses that there must be commercial pricing, (tariff hike) to make it attractive
*Reveals that with increased tariff for Band (A), there are interests shown by investors
By Olugbenga Salami
Not less than $10 billion is being required annually for the next 10 years to revive the nation’s power sector and end the liquidity challenge by the federal government, the Minister of Power, Mr. Adebayo Adelabu has declared.
Adelabu spoke on Monday at the investigative hearing organized by the Senate Committee on Power on the need for the federal government to halt the new electricity tariff increase by the Nigerian Electricity Regulatory Commission, NERC.
He said: “For this sector to be revived, government needs to spend nothing less than 10 billion dollars annually in the next 10 years.
“This is because of the Infrastructure requirement for the stability of the sector, but the government cannot afford that and so we must make this sector attractive to investors and to lenders.
“So for us to attract investors and investment, we must make the sector attractive, and the only way it can be made attractive is that there must be commercial pricing.
“If the value is still at N66 and the government is not paying subsidies, the investors will not come.
“But now that we have increased traffic for a Band, there is interest being shown by investors”, he said.
According to the minister, the major challenge in the sector was absence of liquidity, saying that the sector has been operating on a subsidised tariff regime, given the absence of a cost reflective tariff.
He, however, said the subsidy had not been funded over the years as huge liabilities were owned the generating companies, GenCos and the gas companies.
Adelabu added that the inability of the government to pay outstanding N2.9 trillion subsidy was due to limited resources, hence the need to evolve measures to sustain the sector.
He, therefore, appealed to the lawmakers to support the process of paying the debt owed operators across the value chain of generation transmission and distribution.
The minister further explained that the increase was based on supply, meaning that any customer that does not receive 20 hours power supply will not be made to pay the new tariff.
To improve power supply, he said the government was investing in hydro electric power, adding that construction of 700 mega watt power plants in Zungeru had commenced, while Kashimbila Hydroelectric power plant of 40 mega watt was awaiting evacuation to improve generation.
The minister said there was also an ongoing investment of 26 small hydro power dams to boost electricity production across the country.
However, members of the committee in their separate remarks decried the experiences of Nigerians on electricity supply over the years, despite the unbundling of the sector.
Specifically, Senator Lola Ashiru (APC Kwara South), said Nigerians were paying for inefficiency of power sector operators.
Ashiru, who is vice chairman of the committee, said there was a lot of inefficiency across the value chain of generation, transmission and distribution.
He said poor Nigerians must be protected, adding that there was a need to consider a reversal of the tariff increase.
Senator Enyinnaya Abaribe (APGA Abia South), who is chairman of the committee said what Nigerians wanted was a solution to the issues and ways to ensure liquidity in the sector.
He also decried the non-appearance of a company “ZIGLAKS” over the failed agreement to provide prepaid meters for Nigerians.
He alleged that the company had received N32 billion in 20 years to meter Nigerian electricity consumers.
Senator Adamu Aliero (PDP Kebbi Central), said due consultation was not made before the tariff increase, stressing that the public was not at peace with the increase, which was over 200 per cent.
